Textures not showing up in rendered mode
The problem existed because of multiple materials assigned to object. Which most of them was Cycles materials.

First step is go to Object Mode and in Material tab delete any unnecessary materials and leave only the one you will use ("character" at the bottom of the list).



Next switch to the Texture tab and check preview to Texture (not needed but helpful), select image "checkered" and check View as Render.



Everything should now work just fine.